Calculation methods: performance based fees

Thanks to the innovative use of Business Rules Technology, calculo makes it possible to automate even the most extensive performance fee settlements to the greatest possible degree.

In brief: The calculo "performance based fees" module

Thanks to the innovative use of Business Rules Technology, calculo makes it possible to automate even the most extensive performance fee settlements to the greatest possible degree and lowest level of detail.

You can evaluate and calculate performance fees from different points of view: from the partner as well as the product level. Conditional parameters, such as cap, floor, hurdle rate, high water mark and other features, can be represented on the system through rule sets.

At the same time, standard and custom rules can be stored for individual contracts. Rules can be assigned at various levels – including at the partner (e.g. asset manager), institutional customer or financial product level. Data used to evaluate the performance of the funds, as well as benchmarks, can be fed into calculo via configurable interfaces.

Performance fee calculations are automated to a large degree, based on the imported data and the associated business rules conditions. They can be calculated or accrued over a variety of periods, e.g. quarterly, monthly or even daily.

Custom settlements, monitoring reports as well as booking and payment triggers can be generated automatically in your accounting system after the calculation.

Benefits

Automate performance fee settlement

Increase efficiency

Accelerate your processes

Optimise time and cost management

Eliminate laborious manual calculations

Ensure auditability

Minimise errors through single or multi-level approval processes

Employ human resources effectively

Ease the burden on specialist departments

Calculations on deepest granular level

Detailed traceability of calculations

Methods and parameters

In principle, calculo can calculate all types of performance-based fees, as long as the data required for the calculation can be imported into calculo.

The calculation is based on a percentage (out)performance, measured against the base volume, e.g. Assets under Management (AuM) and Total Net Assets (TNA).

To determine the applicable percentage one of the following methods can be used: